Disclaimer: This article is for general information only and does not provide legal advice.
Detailed Answer
During estate administration in Idaho, the personal representative (also called an executor or administrator) must manage creditor claims under the Idaho Probate Code. You must follow strict notice requirements, claim deadlines, and a statutory priority scheme to avoid personal liability and ensure fair treatment of creditors.
1. Provide Notice to Creditors
Within 10 days of appointment, publish a “Notice to Creditors” once a week for three consecutive weeks in a paper of general circulation in the county where the estate is being administered. See Idaho Code section 15-3-203. In addition, mail a copy of the notice to all known or reasonably ascertainable creditors to ensure they receive direct notice.
2. Accepting and Rejecting Claims
Creditors must file their claims with the court and mail them to you within three months after the date of the first published notice. See Idaho Code section 15-3-306. Each claim should be in writing, state the amount owed, and describe the basis for the debt. You must review each claim promptly and either allow or reject it in writing.
3. Prioritizing Approved Claims
Once claims are approved, distribute estate assets in the order set by statute. Idaho Code section 15-3-703 establishes this priority:
- Costs and expenses of administration (court fees, attorney fees, appraisal charges)
- Reasonable funeral and burial expenses up to the statutory limit
- Medical and hospital expenses of the last illness
- Family allowances and personal exemptions
- Debts secured by liens or mortgages (paid from the proceeds of the collateral)
- General unsecured creditors
For example, suppose the estate has $20,000 in cash and approved claims for a $5,000 funeral bill, a $2,000 medical bill, and a $10,000 secured mortgage. You would first pay administration costs, then the $5,000 funeral expense, next the $2,000 medical charge, and finally apply any remaining funds to the mortgage debt.
4. Handling Disputed or Late Claims
If a creditor files a late claim or disputes your rejection, you may petition the court to allow or disallow the claim. The court will weigh the equities, consider any prejudice to other creditors, and may permit late submission for good cause shown.
5. Closing the Estate
After distributing assets and resolving any disputes, file a final accounting and petition for discharge. The court will review the distribution, resolve remaining issues, and formally close the estate. Only then is the personal representative relieved of liability.
Helpful Hints
- Track publication dates and make a calendar reminder for the three-month claim deadline.
- Maintain organized records of every claim, notice, and correspondence.
- Consult with a probate attorney for complex estates or major creditor disputes.
- Verify statutory limits for funeral and last-illness expenses in Idaho Code section 15-3-703.
- Respond to each claim in writing, noting your decision and the date.
- Keep beneficiaries informed about creditor claims and distributions.
- Obtain receipts or releases when you pay each creditor.